English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

Consolidated financial results (Japanese Accounting Standards)
for the First Quarter of the fiscal year ending March 31, 2019
Company name:Imagica Robot Holdings Inc.

Filing date: July 31, 2018
Stock exchange listings: Tokyo 1st section

Securities code:

6879

URL:

https://www.imagicarobot.jp/en/

Representative:
Makoto Tsukada, President
Inquiries:
Masakazu Morita, Director and Executive Officer
Quarterly report filing date(as planned):
July 31, 2018
Dividend payment date(as planned):－
Supplemental material of quarterly
Yes
results:
Convening briefing of quarterly results:－

Tel:+81-3-6741-5742(In millions of yen)

1. Consolidated Financial Results for the First Quarter ending June 30, 2018
(April 1, 2018 - June 30, 2018)(1) Consolidated Operating Results(Percentage represents change from the same period of the previous fiscal year.)Net sales

Operating income

Net income attributableto owners of the parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions ofyen%

3 months ending June 30, 2018

19,362

(8.1)

(876)

－

(839)

－

(536)

－

3 months ended June 30, 2017

21,073

11.1

644

－

665

－

1,641

－

(Note) Comprehensive income: 1st quarter ending June 30, 2018: (1,083) millions of yen /－%1st quarter ended June 30, 2017: 1,686 millions of yen /－%Earnings per shareof common stock

Diluted earnings
per share ofcommon stock

yen

yen

3 months ending June 30, 2018(12.10)－3 months ended June 30, 2017

36.87

－

(2) Consolidated Financial Position
Total assets

1st quarter ending June 30, 2018Year ended March 31, 2018

(Reference) Shareholdersʼ equity:

Net assets

Shareholders' equity
ratio to total assets

Millions of yen

Millions of yen%

65,71331,04642.4

70,52932,97841.7

1st quarter ending June 30, 2018: 27,872 millions of yen
Year ended March 31, 2018: 29,425 millions of yen

2. Dividends

Dividend per share

1st quarter- end

2nd quarter- end

3rd quarter- end

Year ended March 31,2018

－

－

－

10.00

10.00

Year ending March 31,2019

－
－

－

10.00

10.00

yen

Year ending March 31,2019(Forecast)

yen

yen

(Note) Changes in dividends forecast from the latest disclosed information: No

Year-endyen

Annualyen

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

3. Consolidated forecast for the fiscal year ending March 31, 2019
(April 1, 2018 - March 31, 2019)(Percentage represents change from the same period of the previous fiscal year.)Net salesYear ending March 31,2019

Operating income

Millions of yen%

Millions of yen%

93,0001.8

1,750(27.8)

Ordinary income
Millions of yen%

1,650 (31.9)

Net income
attributableto owners of theparentEarnings per
shareof commonstock

Millions of yen

%

yen

1,100

(62.5)

24.70(Note) Changes in earnings forecast from the latest disclosed information： Yes(Reference) It is included goodwill amortization 1.6 billion yen due to the acquisition as an expense in the operating income.

* Notes(1) Material changes in subsidiaries during this period (Changes in scope of consolidations resulting
from change is subsidiaries): None
(2) Applying of specific accounting of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and retrospective
1) Changes in accounting policies based on revisions of accounting standards: None
2) Changes in accounting policies other than ones based on revisions of accounting standard: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Number of issued and outstanding shares (common stock)1) Number of issued and outstanding shares at the end of fiscal year (including treasury stock)
As of June 30, 201844,531,567 shares

As of March 31, 201844,531,567 shares

500,108 shares

As of March 31, 2018

108 shares

44,355,635 shares

As of June 30, 201744,531,459 shares

2) Number of treasury stock at the end of fiscal year
As of June 30, 2018
3) Average number of shares
As of June 30, 2018

(Explanation about the appropriate usage of business prospects and other special notes)
・The above-mentioned business forecasts were based on the information available as of the date of therelease of this report.
・Future events may cause the actual results to be significantly different from the forecasts.
(Disclaimer)This document is a translation of the Japanese original. The Japanese original has been disclosed inJapan in accordance with Japanese accounting standards and the Financial Instruments andExchange Act. This document does not contain or constitute any guarantee and the Company will notcompensate any losses and/or damage stemming from actions taken based on this document. In thecase that there is any discrepancy between the Japanese original and this document, the Japaneseoriginal is assumed to be correct.

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

1. Qualitative Information on Results in the First Quarter(1) Explanation of operating results(Overview of the first quarter of the consolidated fiscal year ending March 31, 2019)
During the first quarter of the consolidated fiscal year under review, the Japanese economy saw exports

and production and service activities improve, supported by recovery in overseas economy, mainly the
U.S. Furthermore, consumer spending also picked up due to strong employment and income situation.
Under such environment, the Imagica Robot Group (the “Group”) developed its business extensively in
the Content Creation segment and endeavored to improve its profitability and balance sheet by exertingits collective ability.
Consequently, the Group reported net sales of 19,362 million yen (down 8.1% year-on-year), operating
loss of 876 million yen (operating income of 644 million yen in the previous year), ordinary loss of 839
million yen (ordinary income of 665 million yen in the previous year), and net loss attributable to ownersof the parent of 536 million yen (net income attributable to owners of the parent of 1,641 million yen in
the previous year).

(Performance by Business Segment)
1)

Content Creation

During the first quarter of the consolidated fiscal year under review, the segment saw net sales decrease
from the previous year since the recognition of revenue from theater animations slipped to the second
quarter, although it posted revenue from dramas for over-the-top (OTT) platforms in addition to theater
movies. Meanwhile the segment reported operating loss due to a temporary rise in production costs for a
new series title that started in April 2018 and full-CG works, although orders for TV animation production
were steady.
Consequently, the segment posted operating loss of 374 million yen (operating income of 92 million yen
in the previous year) on net sales of 4,685 million yen (down 10.4% year-on-year).
2)

Production Services

Revenue from the post production service for TV animation and the digital cinema service solidly
increased from the previous year. However, revenue from the post production service for TV programs
decreased from the previous year, since the orders decreased due to the TV programming reshuffle.
Meanwhile the segment reported operating loss despite its efforts to reduce costs in the administrative
division and review capital expenditures, since it failed to cover a decline in gross profit caused bydecreased sales.
In the Personnel Consulting Service, the personnel agency, debugging service, and CG production
businesses grew steadily.
Consequently, the segment posted operating loss of 11 million yen (operating income of 300 million yen
in the previous year) on net sales of 6,228 million yen (down 6.8% year-on-year).
3)

Media Localization

The Localization business in Europe remained stable. However, the Media Localization service inAmericas and Asia saw revenue decreased from the previous year, since the orders for the OTT platform
was much lower than expected and the competition with other companies that engage in the localization
service was intensifying. Operating loss increased from the previous year owing to a fall in gross profit
caused by decreased sales and a rise in fixed costs including production-related costs.
Consequently, the segment posted operating loss of 591 million yen (operating loss of 56 million yen in
the previous year) on net sales of 5,840 million yen (down 3.2% year-on-year).
Since the fiscal year of SDI Media Group, Inc. and its subsidiary ends on December 31, the Group
reflected their performance of three months from January 1, 2018 to March 31, 2018 to the segmentʼs
results for the first quarter of the consolidated fiscal year ending March 31, 2019.

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

4)

Imaging Systems & Solutions

The professional video equipment saw net sales and operating income decrease from the previous year.
This was because the delivery of a large order was delayed to the second quarter or later. Meanwhile,
sales in the imaging business and orders for online systems of TV CM delivery were strong, leading to arise in net sales and operating income. Moreover, in the LSI Development sector, shipments of video andimage processing LSI for China continued growing steadily, resulting in an increase in net sales andoperating income.
Consequently, the segment posted operating income of 204 million yen (down 43.6% year-on-year) on
net sales of 2,919 million yen (down 14.4% year-on-year).

Explanation of financial position(Assets Statement)

Current assets decreased by 4,101 million yen (or 10.3%) from the end of the previous consolidated
fiscal year to 35,559 million yen. This was mainly due to a fall in notes and accounts receivable- trade.
Non-current assets decreased by 714 million yen (or 2.3%) from the end of the previous consolidated
fiscal year to 30,153 million yen. This was mainly due to a fall in goodwill.
Consequently, total assets declined by 4,816 million yen (or 6.8%) from the end of the previous fiscal
year to 65,713 million yen.
(Liabilities Statement)
Current liabilities decreased by 1,299 million yen (or 5.4%) from the end of the previous consolidated
fiscal year to 22,594 million yen. This was mainly due to a fall in accounts payable and provision forbonuses.
Non-current liabilities declined by 1,584 million yen (or 11.6%) from the end of the previous
consolidated fiscal year to 12,072 million yen. This was mainly due to a fall in long-term loans payable.
Consequently, total liabilities decreased by 2,884 million yen (or 7.7%) from the end of the previous
consolidated fiscal year to 34,666 million yen.
(Net Assets)
Net assets declined by 1,931 million yen (or 5.9%) from the end of the previous consolidated fiscal year
to 31,046 million yen. This was mainly due to posting net loss attributable to owners of the parent,
decrease retained earnings because of payment of dividends and purchase of treasury stock.

(2) Explanation of consolidated forecasts

The Group has revised its full-year forecasts of consolidated operational results for the year ending March

31, 2019 announced on May 8, 2018. For details, please refer to “Revision on consolidated forecast”
announced today (on July 31, 2018).

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

2. Quarterly Consolidated Financial Statements(1) Quarterly consolidated balance sheets(Thousands of yen)

Year ended March

1st quarter ending

31, 2018

June 30, 2018

AssetsCurrent assets
Cash and deposits

11,131,784

10,449,868

Notes and accounts receivable- trade18,415,035

13,835,053

Inventories

8,031,571

9,149,535

Other2,142,656

2,175,803

Allowance for doubtful accounts(60,010)(50,797)

39,661,037

35,559,463

Buildings and structures

3,823,616

3,643,687

Machinery and equipment

175,420

175,499

2,943,085

2,944,295

Total current assets
Non-current assets
Property, plant and equipment

Land
Lease Assets

914,502950,115

Construction in progress

99,593152,043

Other

1,632,753

1,731,250

Total Property, plant and equipment

9,588,971

9,596,893
1,172,612

Intangible assets
Software1,213,321

Goodwill

7,255,938

6,795,843

Other

5,163,572

4,757,236

Total Intangible assets

13,632,833

12,725,692

4,436,692

4,552,577

Investments and other assets
Investment securities

614,858

629,479

Lease and guarantee deposits

Stocks of subsidiaries and affiliates

1,167,132

1,173,295

Deferred tax asset

1,054,660

1,114,575

Other
Allowance for doubtful accounts

488,717474,081(115,614)(112,998)

Total Investments and other assets

7,646,445

7,831,011

Total Non-current assets

30,868,250

30,153,596

70,529,288

65,713,060

Total assets

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

(Thousands of yen)

Year ended March

1st quarter ending

31, 2018

June 30, 2018

Liabilities
Current liabilities
Notes and accounts payable- trade

5,788,972

Short-term loans payable

4,982,314

5,271,109
4,940,332

Accounts payable

3,626,139

3,083,921

Income taxes payable

711,802260,757

Provision for bonuses

1,514,231

753,518

95,77841,273

Provision for directors compensations based on profit

63,44961,528Other

Provision for loss on order received

7,111,729

8,182,084

Total current liabilities

23,894,417

22,594,526

8,891,288

7,773,420

601,062

380,646

Non-current liabilities
Long-term loans payable
Long-term accounts payable-other
Deferred tax liabilities

1,011,906

934,939

Net defined benefit liabilities

1,259,724

1,280,316

Other

1,892,742

1,702,820

Total non-current liabilities

13,656,725

12,072,142

Total Liabilities

37,551,142

34,666,669

Net assets
Shareholdersʼ equity
Capital stock

3,244,915

3,244,915

Capital surplus

15,190,725

15,190,725

Retained earnings

9,749,118

8,767,173

Treasury stock
Total shareholdersʼ equity(42)(512,042)

28,184,716

26,690,772

1,689,371

1,774,361

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

(388)

2,247

Revaluation reserve for land

(17,933)(17,933)

Foreign currency translation adjustment(443,870)(580,243)

3,942

3,346

1,241,121

1,181,778

Re-measurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling Interests

3,522,306

3,173,840

Total Net assets

32,978,145

31,046,391

Total liabilities and Net assets

70,529,288

65,713,060

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

(2) Quarterly consolidated statements of income and statements of comprehensive income

Quarterly consolidated statements of income(Thousands of yen)

3months ended

3months ending

June 30, 2017

June 30, 2018

Net sales

21,073,526

19,362,044

Cost of sales

15,186,262

14,615,586

Gross profit

5,887,263

4,746,457

Selling, general and administrative expenses

5,242,319

5,622,937

644,943(876,479)

Operating income
Non-operating income
Interest income

1,034

673

Dividend income

17,665

15,764Equity in earnings of affiliates

2,704

7,146

Foreign exchange gains

5,950

42,695

Other

38,88650,598

Total non-operating income

66,241

116,877

Interest expenses

37,72970,015

Other

8,200

9,980

Total non-operating expenses

45,93079,995

Ordinary income

665,254(839,597)

Non-operating expenses

Extraordinary income
Gain on sales of non-current assets

-

1,173

Gain on sales of subsidiaries and affiliates' stocks

2,177,929-

Total extraordinary income

2,177,929

1,173

Extraordinary losses
Loss on sales of non-current assets

110

-

1,659

3,197

Loss on valuation of investment securities

14,15047

Provision of Allowance for Doubtful Accounts for

34,905--18,500107-

Loss on retirement of non-current assets

Subsidiaries and Affiliates
Relocation-related expenses
Other
Total extraordinary losses
Income before income taxes

50,933

21,744

2,792,250(860,168)

Income taxes

1,213,346

33,542

Profit (loss)

1,578,903(893,711)

Profit (loss) attributable to non-controlling interests
Profit (Loss) attributable to owners of parent(62,915)(357,081)

1,641,818(536,629)

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

Quarterly consolidated statements of comprehensive income(Thousands of yen)
Profit (Loss)

3months ended

3months ending

June 30, 2017

June 30, 2018

1,578,903(893,711)

306,085

82,852-

2,635(197,355)(275,144)

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Re-measurements of defined benefit plans

(683)

(596)

108,046(190,252)

Comprehensive income

1,686,949(1,083,963)

Comprehensive income attributable to owners of parent

1,850,389(595,973)(163,439)(487,989)

Total other comprehensive income

Comprehensive income attributable to non-controllinginterests

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

(3) Notes to quarterly consolidated statements
I.

Segment information

For the 3 months ended June 30,2017 (from April 1, 2017 to June 30, 2017)
Information about operating revenue and profit (loss) by reportable segment(Thousands of yen)Content

Production

Media

Creation

Services

Localization

Imaging
Systems &Sub total

Solutions

Net sales
Sales toexternal

5,203,521

6,552,363

5,945,154

3,336,189

21,037,228

25,630132,42985,92075,542

319,523

5,229,151

6,684,792

6,031,074

3,411,732

21,356,751

92,070300,494(56,919)363,236

698,881

customers
Inter-segment
sales ortransfers
Total
Segment profit(loss)

Amount in the
Adjustments(Note 1)quarterly
consolidated
statement ofincome(Note 2)

Net sales
Sales toexternal

36,29821,073,526(319,523)-(283,224)

21,073,526(53,937)

644,943

customers
Inter-segment
sales ortransfers
Total
Segment profit(loss)
Notes:
1.

The Segment profit (loss) adjustment of (53,937) thousand yen consists of 1,142,071 thousand yen in
profits of holding companies (consolidated financial statement-submitting companies) and intersegment
transaction eliminations of (1,196,009) thousand yen.

2.

The segment profit (loss) adjustment is based on the operating income item in the quarterly
consolidated statements of income.

English translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release shall prevail.

II.

For the 3 months ending June 30,2018 (from April 1, 2018 to June 30, 2018)
Information about operating revenue and profit (loss) by reportable segment
Content

Production

Media

Creation

Services

Localization

Imaging
Systems &Sub total

Solutions

Net sales
Sales toexternal

4,663,959

6,055,183

5,738,458

2,862,777

19,320,379

21,993

173,607

101,863

56,254

353,720

4,685,953

6,228,791

5,840,322

2,919,032

19,674,099(374,212)(11,914)(591,514)

204,968(772,672)

customers
Inter-segment
sales ortransfers
Total
Segment profit(loss)

Amount in the
Adjustments(Note 1)quarterly
consolidated
statement ofincome(Note 2)

Net sales
Sales toexternal

41,664

19,362,044(353,720)-(312,055)

19,362,044(103,806)(876,479)

customers
Inter-segment
sales ortransfers
Total
Segment profit(loss)
Notes:
1.

The Segment profit (loss) adjustment of (103,806) thousand yen consists of 1,096,368 thousand yen
in profits of holding companies (consolidated financial statement-submitting companies) andintersegment transaction eliminations of (1,200,175) thousand yen.

2.

The segment profit (loss) adjustment is based on the operating income item in the quarterly
consolidated statements of income.